The
S&P 500 dropped 2% today, Monday, back to 1201. VIX was up nearly 20% - ouch! Still, we were due for a pullback, so today’s
action is mostly meaningless.
The pundits on CNBC said it was caused by European bank issues that were
not resolved. I doubt that anyone really
thought the issues would be resolved over the weekend.
We
may go back and re-visit the 1099 area.
I think that is less likely than some down days followed by a slow,
un-even, upward movement thru the end the year.
Some have even suggested a big rally.
The
argument for a re-test would be that we never had the low-volume, re-test in
the 1100 area of the S&P 500. This
is less likely, as I have suggested in recent posts.
Some
Wall St pros have suggested that we need a higher-low on the S&P to signal
an all clear. In that scenario, we drop
some and then move up. The lowest
point in that drop is the higher-low, as long as it is higher than 1099.
The
real information will be gleaned from the earnings reports as we go through
earnings season. IBM earnings were
mostly in-line today, but revenues were just a touch low and Big Blue was punished,
down almost 4% in after-hours trading. That could lead to more selling tomorrow.
NTSM
is still BUY, but too many days like today will put an end to our positive
outlook.
I bought back into the stock market at S&P 500 1155 on 7 Oct
after the 6 Oct NTSM buy signal.
I am 100% long in the long term portfolio (100% stocks in the
401k.) and 100% long in the trading portfolio. (See the page “How to Use the NTSM System” –
the link is on the right side of this page).
